Financial system of computers

ABSTRACT

An automated payment system particularly suited for purchases over a distributed computer network such as the Internet. In such a distributed computer network, a merchant or vending computer contains certain promotional information which is communicated to a customer&#39;s computer. Based upon the promotional information, the operator of the customer&#39;s computer decides to purchase the services or goods described by the promotional information. The customer&#39;s computer is linked to a payment processing computer and the customer&#39;s credit card number and the amount of the goods or services is transmitted to the payment processing computer. The payment processing computer automatically contacts a bank for verification of the credit card and amount; the bank transmits an authorization to the payment processing computer. The payment processing computer communicates a self-generated transaction indicia, and in some embodiments a password, to the customer&#39;s computer. In the embodiment where a password is used, the customer&#39;s computer uses the password with the merchant&#39;s computer in obtaining access to protected information or to establish shipping instructions.

This is a continuation of U.S. patent application Ser. No. 08/597,017,entitled "An Improved Financial Transactions System" filed Feb. 5, 1996now U.S. Pat. No. 05,822,737.

BACKGROUND OF THE INVENTION

This invention relates generally to financial transactions and moreparticularly to transactions involving credit or debit cards.

The time is fast approaching where a significant amount of commerce willbe conducted using distributed networks of computers such as theInternet. The reason this ground-swell of commerce will occur is theability of a single merchant to economically reach a vast number ofpotential customers at substantially no costs. Further, the customersare able to review a great number of vendors and their products with theease of a few key strokes and clicks of the mouse.

Although there are vast numbers of merchants already using suchnetworks, the sales volume has been particularly low due to a variety ofreasons. One reason which has depressed commerce on the networks, is thedifficulty with which customers can pay for their purchases.

A variety of techniques have been developed to cure this problem rangingfrom accepting phone orders to the establishment of another currencycalled "E-Cash".

Phone orders in response to merchant promotional materials creates avariety of problems. One major problem is the requirements for phonelines and personnel to receive and process the phone orders. Anotherhurdle is the simple fact that most customers have a single phone lineto their residence and this line is used by the computer for accessingthe network; the customer has to disconnect from the network to make thephone order.

Although E-Cash is a viable alternative, it is faced with some enormousproblems which will be difficult or impossible to address. Theseinclude: counterfeiting problems; government reluctance to accept theconcept; difficulties in getting access for handling E-Cash; and, thelow number of users and merchants which can use E-Cash.

It is clear from the foregoing that there is a need for an efficientmethodology and system to accept payment over distributed computernetworks.

SUMMARY OF THE INVENTION

The present invention contemplates a totally automated system forsecuring payment via a distributed network of computers. In thiscontext, the invention creates an automated payment system particularlysuited for purchases over a network such as the Internet.

Although the present invention is described relative to the Internet,its application is not so limited and is intended to be used on anydistributed computer system in which merchants and consumers interactfor the purpose of supplying and purchasing goods or services.

In such a distributed computer network, a merchant or vending computercontains certain promotional information which is communicated to acustomer's computer. This information is intended to give the customersufficient information to make a decision on if the goods/services areacceptable.

As used within this discussion, the term "merchant computer" signifies acomputer system which is used for the purpose of selling goods orservices. The vendor itself does not necessarily own the computer; insome situations, the computer is operated on behalf of the merchant orvendor.

Based upon the promotional information, the consumer/operator of thecustomer's computer decides to purchase the services or goods describedby the promotional information.

It is at this point where the present invention is particularly powerfulas it provides a simple, easy, methodology and linkage for the customerto pay for the goods/services.

In this context, the customer's computer is linked to a paymentprocessing computer and the customer's credit card number and the amountof the goods or services is transmitted to the payment processingcomputer. For security reasons, an encrypting software package is firstdownloaded to the customer's computer so that the credit card number issecure from "hackers" who might also be on the network.

Although the term "credit card" is used, the invention covers the use ofany type of financial guarantee card such as automatic debit accounts,checking account numbers, savings account numbers, and other suchdevices obvious to those of ordinary skill in the art.

The payment processing computer automatically contacts a bank forverification of the credit card and amount; the bank transmits anauthorization to the payment processing computer. This authorization,usually in the form of a number, is stored within the payment processingcomputer's memory for later reference.

The link or connection with the bank is terminated by the paymentprocessing computer and the payment processing computer turns itsattention to the customer's computer. The payment processing computercommunicates a self-generated transaction indicia, and in someembodiments a password, to the customer's computer.

The transaction indicia is generated by the payment processing computerfor proper record keeping. The transaction indicia is also used by thecustomer to verify that an order has been generated and accepted.

The password is defined by the merchant's computer for the paymentprocessing computer to pass along to the customer's computer. Thepassword is used by the customer's computer to gain access to restrictedmaterial within the merchant's computer.

As example, assume the merchant's computer is supplying information asto genealogy. As an initial process, the customer enters the name beingresearched and receives a preliminary report on the genealogy (thepromotional material). To proceed though, and get the actual data, thecustomer must pay to access this further information.

To do so, the customer links with the payment processing computer, andin the manner outlined above, receives back the transaction indicia andthe password. The payment processing computer links the customercomputer back to the merchant computer; the customer provides thepassword to the merchant's computer and is given access to the fullgenealogy report.

As outlined in this example, in the embodiment where a password is used,the customer's computer uses the password with the merchant's computerin obtaining access to protected information or to establish shippinginstructions.

The re-linking of the customer computer to the merchant computer isaccomplished in a variety of ways. In the preferred embodiment, thepayment processing computer obtains the merchant's address or UniqueRecognition Location (URL) from the customer computer when the customerconnects with the payment processing computer. This URL is used in avariety of ways, to identify the merchant, to establish the amount ofthe product/service, and to establish the return URL when the paymentprocessing computer is done with its task for the customer computer.

By selective use of the URL on the merchant's part, the URL transmits atremendous amount of information to the payment processing computer. Asexample, assume the URL for the homepage of the merchant is:http://merchant.com/widget.

When the merchant is selling a single product (a widget), this URL iseasy to match to the product. When the merchant wants to sell a varietyof widgets, then for a blue widget, the URL might be:http://merchant.com/widget/blue.

In some embodiments, the customer's computer is not linked back to theoriginating URL of the Merchant computer but rather to another URL. Thereturn URL is stored in the payment processing computer and is used whenthe Merchant wants the customer/consumer to be passed back to adifferent location (i.e. where the restricted access information isaccessible, or to inform the consumer that their card has beenrejected).

The invention, together with various embodiments thereof, will be morefully explained by the accompanying drawings and the followingdescriptions.

DRAWINGS IN BRIEF

FIGS. 1A and 1B are block diagrams of the two computer configurationsused in the preferred embodiment.

FIG. 1C is a graphical representation of the preferred memoryorganization for the computer illustrated in FIG. 1A.

FIGS. 2A, 2B, 2C, 2D, and 2E graphically illustrate the connections anddisconnections of the preferred order.

FIGS. 3A, 3B, 3C, and 3D are frontal views of one embodiment of aconsumer's display screen.

FIG. 4A is a flow-chart of the preferred embodiment's payment processingoperation.

FIG. 4B is a flow-chart of an alternative embodiment's paymentprocessing operation.

FIG. 5 is a flow-chart of the operation of the merchant's computer.

DRAWINGS IN DETAIL

FIGS. 1A and 1B are block diagrams of the two computer configurationsused in the preferred embodiment.

FIG. 1A illustrates the configuration of the preferred paymentprocessing computer. As shown, computer 10A is a simple layout of aCentral-Processing-Unit (CPU) 11A which uses both non-volatile memory12A and Random-Access-Memory (RAM) 13A.

Communication to and from CPU 11A is via modem 14A which communicateswith other computers via the network connected by phone line 15A.

Computer 10B, illustrated in FIG. 1B, shows the preferred computerconfiguration used for the merchant computer and the customer computer.Again, CPU 11B is connected to memories RAM 13B and non-volatile memory12B. In the case of the merchant computer, the promotional material isstored on non-volatile memory 12B and is retrieved and communicated byCPU 11B using modem 14B and phone line 15B.

This system is able to communicate with an operator via monitor 16 forvisual information. Monitor 16 is used for the perusal of thepromotional material by the customer.

Keyboard 17 is used to communicate operator commands to CPU 11B. In likefashion, mouse input device 18 is also used for operator input to CPU11B.

Optional printer 19 is used to create a hard copy of the material beingdisplayed to the operator/customer via monitor 16.

The differences between the computers shown in FIGS. 1A and 1B arepronounce since the payment processing computer of FIG. 1A does notrequire input or direction from a human operator. Rather, in thepreferred embodiment, the payment processing computer runs totallyautomatically and collects all of the data and information it requiresfor its operation automatically from the computers with which it islinked and with what is stored in its memory.

FIG. 1C is a graphical representation of the preferred memoryorganization for the computer illustrated in FIG. 1A.

Memory 9, located preferably in non-volatile memory 12A, has threesections. The first section 8A is the product listing reference which iscomposed of multiple groupings. This data remains relative constant andis defined by the merchant. Each grouping, such as 7A, includes dataidentifying:

Part Number

Merchant Identification

Cost of Product/Service

Description of the Product/Service

Authorized Return URL

Rejected Return URL

Password

The second section is for defining the merchant's information. Eachgrouping 7B within section 8B contains relative constant informationsuch as:

Merchant Identification

Business Name

Contact Name within the Business

Business Address

E-Mail address for the Business

Bank Checking Number for the Business

The third section 8C is an accounting listing which is constantlyup-graded as new payments are processed. This section is used for makingfull accounting to the various merchants. Grouping 7C within section 8Ccontain:

Transaction Number

Date of transaction

Amount of the transaction

Part number involved in transaction

Credit Card Number

Authorization Number

The authorization number is the indicia received from the bankindicating that the credit card charge has been accepted.

The use of memory 9 allows the payment processing computer to haveaccess to the necessary information to handle the linkage and performthe proper accounting.

FIGS. 2A, 2B, 2C, 2D, and 2E graphically illustrate the connections anddisconnections of the preferred order.

Referring to FIG. 2A, in a typical fashion, a consumer via customercomputer 21 enters the network 20 and searches through various merchantcomputers until the consumer locates the merchant of choice and connectswith merchant computer 22. Merchant computer 22 communicates thepromotional material via network 20 to customer computer 21.

When the consumer decides to buy the service or product from merchant22, as shown in FIG. 2B, the link with merchant computer 22 is brokenand customer computer 21 links with the payment processing computer 23.In the change from merchant computer 22 to payment processing computer23, an indicia of the URL or the product being promoted by merchantcomputer 22 is communicated to the payment processing computer 23.

The indicia as a URL of the last site is available through normalnetwork operations and its handling is obvious to those of ordinaryskill in the art. The product number is easily combined with the URL;thereby making the product number also available to the paymentprocessing computer 23.

In some embodiments, the originating URL is crossed checked to a memorydata base to achieve the product number. In this embodiment, themerchant structures its material so that only a single product/serviceis associated with a specific URL.

Using the product number (or developing the product number from themerchant's URL), the payment processing computer is able to crossreference its own memory (as described earlier) to achieve otherimportant information including: the amount of the product/service, adescription of the product/service, the name and address of themerchant, and other which will be used in later operations.

The payment processing computer 23 accepts from the customer computer21, the credit card account number which is to be debited the amount ofthe product.

As shown in FIG. 2C, in this embodiment, while maintaining linkage withthe customer computer 21, the payment processing computer 23 establishesa link via phone lines 25 with the credit card server computer 24. Thecredit card account number and amount is communicated to the credit cardserver computer 24 which responds to the payment processing computer 23with an authorization indicia. This authorization indicia gives theacceptance or denial of the charge.

If a product is to be shipped, and if the charge has been authorized, asshown in FIG. 2D, the payment processing computer 23 connects with themerchant computer 22 and directs the merchant to ship the product to theconsumer.

As shown in FIG. 2E, since the payment processing computer 23 hasidentified the product number, it is able to retrieve from its memorythe URL for reconnecting the customer computer 21 with the merchantcomputer 22. In this manner, the entire operation is totally transparentto the consumer since they feel they have been continuously working withthe merchant computer 22.

Further, using the URL's from its memory, the payment processingcomputer 23 is able to link the customer computer 21 to the merchantcomputer 22 at an address which is different from where the consumer wasoriginally connected. In this manner, the payment processing computer 23is able to direct the consumer to different locations which areconsistent with the authorization indicia (accept/reject) on theircredit card.

As example, assume, the credit card was authorized, then the consumercould be reconnected to an area which has restricted access so that theconsumer can gain the information paid for; if on the other hand, thecredit card was rejected, the connection would be to a page indicatingsuch and possibly asking for another card number.

In this manner, the payment processing computer 23 is able to controlthe operation and interface between the customer computer 21 and themerchant computer 22.

Periodically, the payment processing computer 23 connects via the phonelines 25 with the credit card server 24 and instructs it to transfer theappropriate amount of funds to the merchant's bank computer 26 so thatthe merchant has access to the funds paid for his product/serviceprovided to the consumer.

FIGS. 3A, 3B, 3C, and 3D are frontal views of one embodiment of aconsumer's display screen.

Screen 30A is designed to provide the promotional information so thatthe consumer is attracted to purchase the product. In screen 30A is thename of the merchant company (XYZ CO.) 31, the name of the product(widget) 32, the price ($14.95) 33, and the part number (#10234) 34.

Also located on screen 30A is a software key 35 which allows theconsumer to pay for the product. In this embodiment, by activating thissoftware key 35 (typically through a click of the mouse), screen 30A ischanged to screen 30B which is identical except that the software key 35has been replaced with an order window 36.

Order window 36 allows the consumer to complete the necessaryinformation to order the product. This includes the part number 37A, theamount 37B, and the credit card number 37C. When the consumer is ready,the software key "Send" 37D or the software key "Cancel" 37E isactivated. In the case of a cancel, the screen returns to screen 30A.

In a "send" 37D, mode, the payment processing computer contacts the bankcomputer and determines if the credit card is valid and if the amount isavailable. If the charge is authorized, the screen changes to 30C inwhich the order window 36 has been replaced with authorization window 38which shows that the charge has been accepted 39A, the transaction no.(A1483) 39B, and the password ("GO") 39C which the consumer is to usewith the merchant.

When this information has either been printed or committed to memory,the consumer activates software key 39D to "Proceed" to screen 30D. Atthis point, the consumer is able to enter the password 29 so that therestricted access is lifted. In the genealogy example, it is at thispoint the consumer gains access to the full report.

FIG. 4A is a flow-chart of the preferred embodiment's payment processingoperation.

After start 40A, a connection is made with the customer computer 41A andthe encryption software is downloaded to the customer computer 41B.Encryption software is preferably used for transmittal of the creditcard number so that the integrity of the card is not jeopardized.

The consumer computer then communicates, and the payment processingcomputer accepts, the account number, the amount, and the identificationof the product or service, 42A. A connection is made with the creditcard server 41C and the account number and amount is transmitted 41D tothe credit card server over the established phone lines. In response tothis query, the authorization data is received 42B and the connectionwith the credit card server 41E is broken.

A transaction indicia is generated 41F. This transaction indicia is notthe authorization data but serves as an internal monitoring system forthe payment processing computer so that the accounting is kept accurate.

From the memory, the password is withdrawn 41G for the product soordered; and, the password and transaction indicia is transmitted to thecustomer computer 41H.

At this point, the connection with the customer computer is terminated41I and the program stops 40B.

FIG. 4B is a flow-chart of an alternative embodiment's paymentprocessing operation.

After start 43A, the program connects with the customer computer 44A andat the same time obtains the merchant URL 45A. Using the merchant URL,the payment processing computer searches its memory and identifies themerchant number, the part number, and the purchase amount 44B.

The encryption software is downloaded into the customer computer 44C andthe credit card account number is received 45. A connection is then madewith the credit card server computer 44D and the account number and theamount is transmitted 44E. This inquiry results in an authorization code45C being received and the connection with the credit card server beingbroken 44F.

A check is then made to see if the credit card purchase was authorized46A.

If the credit card purchase was denied, the URL to use for a rejectionis withdrawn from memory 44G and the Customer computer is connected tothe merchant computer at this URL 44H leaving the payment processingcomputer able to disconnect 44I and stop 43B.

Should the credit card purchase be accepted, 46A, then the programgenerates a transaction identification 44J. This transactionidentification is stored along with the date, amount of purchase, andthe merchant number 44K.

The password is retrieved from memory 44L and it, together with thetransaction identification, is transmitted to the customer computer 44M.

From memory, the authorized URL is withdrawn 44N.

A determination, based upon stored data, is made as to the character ofthe product (service or goods) 46B. If the product relates to goodswhich are to be shipped, a shipping order including the transactionidentification, the amount, the date, and address of the customer, iscommunicated to the merchant 440 to satisfy the order. If the product isa "service", the program skis to step 44P.

The customer computer is then connected to the authorized URL 44P andthe connection with the customer computer is terminated 44Q allowing theprogram to stop 43C.

FIG. 5 is a flow-chart of the operation of the merchant's computer.

After start 50A, the merchant computer connects with the customercomputer 51A and communicates the promotional material 52A. The passwordis received from the customer 52B and is checked to see if it is thecorrect password 53A.

If the password is incorrect, a determination is made on if it is thecustomer's first try 53B; if it is, then the customer is given anotherchance to enter the correct password 52B. If the customer has triedtwice to enter the correct password, the connection with the customer isterminated 51C and the program stops 50C.

If the password is correct, 53A, then the secure or restricted accessdata is communicated to the customer's computer 51D and the connectionwith the customer's computer is terminated 51B. The program then stopsSOB.

In this manner, secure information is selectively transmitted to acustomer's computer upon the presentation of a password.

It is clear from the foregoing that the present invention creates ahighly improved system for acceptance and processing of payments over adistributed computer network.

What is claimed is:
 1. A financial transaction system comprising:a) acomputer network; b) a phone network; c) a merchant computer containingpromotional data, said merchant computer having automatic means forcommunicating said promotional data via said computer network to aremote computer; d) a customer computer being linked via said computernetwork with said merchant computer and receiving said promotional data,said customer computer having automatic means responsive to input froman operator, for initiating an order; d) a bank computer; and, e) afinancial processing computer, remote from said merchant computer havingautomatic means responsive to said order for:1) receiving customeraccount data and amount data from said customer computer and saidmerchant computer via said computer network, 2) communicating saidcustomer amount data and said amount data to said bank computer via saidPhone network, 3) receiving an authorization indicia from said bankcomputer via the phone network, and, 4) via said computer network,communicatingA) a representation of said authorization indicia to saidcustomer computer, and, B) a representation of said authorizationindicia to said merchant computer.
 2. The financial transaction systemaccording to claim 1, wherein said merchant computer further includingautomatic means for generating a shipping order in response to saidrepresentation of said authorization indicia.
 3. The financialtransaction system according to claim 1,a) wherein said financialprocessing computer further including automatic means for communicatinga password to said customer computer; and, b) wherein said merchantcomputer further includes:1) memory means containing secured data, and,2) automatic means for transmitting the secured data to said customercomputer in response to the password.
 4. The financial transactionsystem according to claim 3, wherein said password and saidrepresentation of said authorization indicia are communicated to saidcustomer computer via said merchant computer.
 5. A financial transactionsystem comprising:a) a merchant computer containing promotional datasaid merchant computer having automatic means for communicating saidpromotional data via a computer network to a remote computer; and, b) afinancial processing computer, remote from said merchant computer, saidfinancial processing computer having automatic means for:1) receivingcustomer account data and amount data via said computer network, 2)obtaining an authorization indicia via a phone network, and, 3) via saidcomputer network, communicating a representation of said authorizationindicia to a remote computer.
 6. The financial transaction systemaccording to claim 5, wherein said merchant computer further includesautomatic means for generating a shipping order in response to saidrepresentation of said authorization indicia.
 7. The financialtransaction system according to claim 5,a) wherein said financialprocessing computer further includes automatic means for communicating apassword to said customer computer; and, b) wherein said merchantcomputer further includes:1) memory means containing secured data, and,2) automatic means for transmitting the secured data to said customercomputer in response to the password.